Singapore poised for first GST hike?

SINGAPORE: Singapore, a citystate famed for the low-tax model that helped transform it from a gritty port town to an Asian Manhattan, is expected to put something unusual in this year’s government budget announcement: a tax hike.

Nine of 10 economists polled think authorities will on Monday unveil the first rise in the goods and services tax (GST) since 2007.

Policymakers have flagged the need to increase revenue to meet future social spending needs of a rapidly ageing population.

Economists say Finance Minister Heng Swee Keat might also make tweaks to taxes on e-commerce retailers, wealth and sugar when he presents the budget on Monday.

Any tax measures would come after Singapore, last year, had its fastest economic growth in three years, estimated at 3.5 per cent.

“Strong economic growth was a good pull factor supporting the tax hike,” said Francis Tan, an economist for Singapore’s United Overseas Bank.

He expects GST to be increased by one percentage point this year to eight per cent, followed by another one percentage point hike next year.